The misuse of purchase cards highlighted by internal audit demonstrates there is still work to do in strengthening financial grip within the council’

A general view of the Council House in Nottingham city centre.(Image: Joseph Raynor/ Nottingham Post)

The number of taxpayer-funded credit cards used by Nottingham City Council staff has been “drastically reduced” following concerns over misuse.

Labour-led Nottingham City Council, which has been on a path towards financial sustainability after declaring effective bankruptcy in 2023, says it uses business purchase cards for low-value, emergency or critical business transactions.

It says that while the cards provide flexibility, they carry “inherent risks of fraud, misuse, and uncontrolled expenditure which may not align with standards or value-for-money principles.”

A new internal review – or audit – has found 16 potential breaches and one confirmed breach of financial regulations.

The review further found that 10 per cent of transactions, valued at around £120,000, were not reviewed, while some transactions involved potential self-approval.

Around 40 per cent of sampled purchases also lacked clear alignment with emergency or business-critical policies.

Speaking at an audit committee meeting on Friday (March 27), Lynne Dowdican, chief internal auditor, said: “It did show us some considerable non-compliance in that area, limited assurance, and management of that area have now taken even more stringent measures than what the audit team recommended, because we feel it is fundamental to improving the control environment.

“So we’ve got quite a lot of work happening in that space to limit the exposure.

“We drastically reduced the amount of purchase cards that are available. We are looking at how those service areas can do their business in better ways using purchase orders, call-off contracts, rather than this over-reliance on what is in effect a credit card.”

According to the audit report, the number of cardholders has been reduced from 800 in 2020/21, to 280 as of last year.

As a result, monthly expenditure has dropped from £400,000 at peak usage in 2023 to £117,000 as of September 2025.

Stuart Fair, the council’s finance director and Section 151 officer, says the number has been reduced further to 80.

He said the council had followed a similar crackdown done by the Labour Government in March last year, when it said thousands of taxpayer-funded credit cards would be cancelled to prevent “wasteful” spending.

The Cabinet Office ordered departments to freeze around 20,000 cards in circulation.

“There has been a significant exercise underway, as a consequence of the audit work,” he added.

“We followed the same path the Cabinet Office did last year.”

Speaking to the Local Democracy Reporting Service after the meeting, Cllr Andrew Rule, who sits on the committee, said: “The misuse of purchase cards highlighted by internal audit demonstrates there is still work to do in strengthening financial grip within the council – given the spending controls enacted by the previous section 151 officer I would have thought stopping the use of purchase cards would have have been an obvious place to start.

“Whilst reducing the number of purchase cards issued to staff will hopefully reduce the instances of misuse, I would go further and restrict the issue of purchase cards to only the highest levels of senior management, with proposed spend counters authorised by senior members of the council’s finance team.”